Grb14 belongs to the Grb7 family of molecular adapters and was identified as an inhibitor of insulin signaling. Grb14 binds to activated insulin receptors (IR) and inhibits their catalytic activity. To gain more insight into the Grb14 molecular mechanism of action, we generated various mutants and studied the Grb14-IR interaction using coimmunoprecipitation and bioluminescence resonance energy transfer (BRET) experiments. Biological activity was further analyzed using the Xenopus oocyte model and a functional complementation assay measuring cellular proliferation rate in Grb14 knockout mouse embryonic fibroblasts. These studies identified two important interaction sites, Grb14 L404-IR L1038 and Grb14 R385-IR K1168, involving the IR alphaC-helix and activation loop, respectively. Interestingly, the former involves residues that are likely to be crucial for the specificity of IR binding with regard to other members of the Grb7 family. In addition, mutation of the Grb14-S370 residue suggested that its phosphorylation status controlled the biological activity of the protein. We further demonstrated that insulin-induced Grb14-PDK1 interaction is required in addition to Grb14-IR binding to mediate maximal inhibition of insulin signaling. This study provides important insights into the molecular determinants of Grb14 action by demonstrating that Grb14 regulates insulin action at two levels, through IR binding and by interfering with downstream pathways. Indeed, a precise knowledge of the molecular mechanism of insulin signaling inhibition by Grb14 is a prerequisite for the development of insulin-sensitizing molecules to treat pathophysiological states such as obesity or type 2 diabetes.